Return of the playboy fraudster

He has a new name and is out of prison, but a convicted fraudster who cheated British taxpayers out of £76m is back and doing business in Ireland, says Investigative Correspondent Conor Ryan

OUT of jail and with a new name, a playboy tax cheat, Ian Leaf, is back working with the subprime lender he established here at the height of his international fraud business.

Fifteen years ago, from a mansion in the Swiss Alps, Leaf (pictured left) ran a sophisticated scam, juggling money across the world and using it to cheat British taxpayers out of Stg£76m.

His funding involved fraudulent documents drawn from a bank he set up on a Pacific Island that is smaller than Killarney’s Lough Leane and where less than 10,000 people live.

During the 1990s, Leaf, 59, lived an extraordinarily lavish lifestyle. His complex business model took years for the tax authorities to unravel.

They delved into dozens of companies: He used 13 firms to falsely declare losses and reclaim corporation tax he was not due.

When he was convicted, in 2005, the cost of his crimes was stg£76m; £55m in lost taxes and £22m in reclaimed taxes.

Leaf has since served his time and changed his name to Ian Andrews.

Leaf/Andrews’ empire began to dissolve five years before his conviction, when his private jet stopped for a shopping trip in Rome and he was arrested on an international warrant.

This was not before he had spread his tentacles across the world. His enterprise involved setting up an Irish company with an eye on the unlicensed, subprime lending market.

Home Funding Corporation was established in 1997 by Leaf/Andrews. It was funded through an investment vehicle based in the Bahamas. The firm had different directors, but the company accounts noted that these people did not know the controlling party.

Home Funding Corporation has changed hands, but is still in operation. It has acquired high-interest, subprime loans, mostly linked to farm land, from other unlicensed lenders in Ireland.

When it last filed accounts, the company had €17.7m worth of loans on its books, including the outstanding interest due. The value of the loans had grown from €14.4m in 2010.

But the firm has made provisions for €12m worth of possible bad debts within its loan book. It did €3.3m worth of business in Ireland in 2011.

The company is involved in a number of cases in the Irish courts, where it is seeking to take ownership of farms that were offered as security for the subprime loans.

But Home Funding Corporation is also defending actions in which borrowers are disputing the claims the company has made to the title. Home Funding Corporation, which is under a new owner, said it has numerous clients and is not at liberty to discuss their accounts.

The Irish Examiner has spoken to a number of the borrowers involved.

At the start of last year, Home Funding Corporation had two directors, who were paid €60,000.

Neither of these were Leaf/Andrews.

According to the accounts, the controlling party for Home Funding Corporation was London-based accountant and director, Richard Ashken, 60. According to company records, he joined the board in 2011.

Mr Ashken is also the chairman of Home Funding Corporation’s parent group, City Corporation. It runs financial institutions in Britain, Ireland, and New Zealand.

The fact that Leaf/Andrews is back working with Home Funding Corporation has not been known. When he was contacted this week, he said the person named Ian Leaf did not exist.

Leaf/Andrews’ low-key presence is a marked difference from the lifestyle he enjoyed before his arrest.

PLAYBOY FRAUDSTER

Leaf/Andrews developed an outwardly successful business as a specialist car salesman, after he qualified as a chartered accountant. He sold his dealership in the early 1980s and used the profits to move to other ventures.

With his first wife, he had a son and a daughter.

In 1987, he and his second wife relocated to a mansion in Geneva. From there, he built up an empire crowned with two private jets and a garage of luxury cars.

After one of his court appearances, the Daily Mirror newspaper reported that his jets were used to keep hair appointments in Britain.

Another article noted that he secured a phone number beginning with James Bond’s signature code, 007.

Leaf/Andrews was first arrested on an Interpol warrant, in 2000, when he landed his private jet in Rome and produced an out-of-date passport. The warrant was triggered and he spent the next nine months in jail, awaiting a ruling. Before this was delivered, he was allowed a temporary release.

He took a train to northern Italy, hired a guide, hiked across the Alps, and returned to Switzerland, where he moved to a secluded mansion at Verbier, in the Alps.

From the alpine tax-haven, he fought extradition back to Britain. The authorities succeeded in repatriating him when fraud charges were also tabled. While a warrant was out for his arrest, Leaf/Andrews was living in his lavish mansion and was married to his third wife, Dominique Forsberg.

Ms Forsberg was Sweden’s Miss Universe entrant in 1994.

Leaf/Andrews eventually returned to Britain, in 2004, and was convicted the following year.

He was sentenced to 12.5 years in jail, but this was reduced to 10 years on appeal. He had served time awaiting his trial and he was also entitled to early release, under licence.

The crimes he was charged with covered a date range in the early 1990s. This was before the Home Funding Corporation was set up in Ireland.

The crimes involved the purchase of loss-making companies and the transference of their tax liabilities from other firms that he owned. Corporation tax could be claimed back from the then Inland Revenue.

The scam was facilitated through fictitious documents generated from a bank registered in the Pacific island of Nauru. The bank was controlled by Leaf/Andrews and it loaned huge sums of money to his other companies.

In 2005, the Revenue compliance director, Dave Hartnett, said it was a very complex scheme that Leaf/Andrews hoped to operate, without detection, from Switzerland.

“Leaf (Andrews) believed that by leaving the UK he could escape justice, but he was wrong. We will seek to bring to justice anyone who sets out to line their own pockets at the expense of honest taxpayers.

“This was a multimillion-pound crime and the sentence reflects the seriousness of his offences,” he said.

SETTING UP IN IRELAND

The Home Funding Corporation was established in Ireland in 1997, when Leaf/Andrews secured the assistance of another subprime lender, Ronald Weisz.

Mr Weisz was living between Britain and Ireland, at the time.

However, two years earlier he had pleaded guilty to a fraud charge in New York, for which he was fined and placed on probation. Mr Weisz said he was never a shareholder or investor in the Home Funding Corporation.

Mr Weisz said when the Englishman wanted to set up in Ireland he helped him, and his son Jarrod, to get established.

Mr Weisz said he also sold mortgages, which had been taken out with his own Wise Mortgage Company Ltd, to Home Funding Corporation.

Mr Weisz said this practice, securitisation, was routine among financial institutions. He also sold loans to other companies.

Mr Weisz’s fraud conviction was on a smaller scale.

An arrest warrant had existed for a long time and, in 1995, he struck a deal with the FBI to return to America, where he could be arrested at JFK airport.

He pleaded guilty to one of five charges that had been brought against him.

These related to the supply of fraudulent information to secure a loan from a bank in the late 1970s. A statement from the Home Funding Corporation said that it was no longer connected to the Wise group of companies.

“Mr Weisz acted for the company when it was established in the 1990s, but his involvement with it ceased well over a decade ago,” it said.

Mr Weisz said he has had not dealings with the Home Funding Corporation for a number of years and had only worked with Leaf/Andrews.

Mr Weisz said he did not know any of its current directors or owners.

THE IRISH BUSINESS

At the end of 2011, there were more than €17m worth of loans booked with the Home Funding Corporation. It has been established, through the customers themselves or from court filings, that a number of these were acquired from Mr Weisz.

Documents filed with the Companies Registration Office list more than 40 individual mortgages held by Home Funding Corporation. Most of these were taken out between 1997 and 2000.

These were all the subject of charges held by a Swiss-based private lender and another private financier in Britain.

The charges covered all the loans and all the interest due on the loans.

One of the loans involves a Tipperary farmer who borrowed €80,000 from Wise Finance Company in 1997; security was given on three associated properties. One of these properties was seized four years later; another loan was given to clear the balance. This loan was then sold to Home Finance Corporation.

Before that, an agreement was struck for the borrower to sell his land to cancel out the debt, which by then had risen to €165,000.

However, the borrower subsequently took separate proceedings and claimed that the 2001 agreement was struck under duress and undue influence.

This case is still before the courts. The Wise Finance Company and the Home Funding Corporation are co-defendants.

Documents from another borrower, which are tied to land in North Cork, were also seen by the Irish Examiner.

These show that a disputed loan, with a principal of less than IR£40,000, now stands at more than €500,000.

Interest statements show that the balance has grown by more than €100,000 in the last year.

Home Funding Corporation used to share the same solicitor as Mr Weisz, but this is no longer the case.

Home Funding Corporation is currently represented by Lyons Kenny Solicitors in Dublin. Its office, at No 57, Fitzwilliam Square, is also the registered address and contact point for debtors of Home Funding Corporation.

A statement from Lyons Kenny partner Barry Lyons said it could not comment on Leaf/Andrews’ past. “As you are aware, we are a firm of solicitors. We provide commercial legal services for Home Funding Corporation Limited, and over 3,000 other clients. You will appreciate we are not at liberty to discuss the business of individual clients. Any queries in relation to the trade of Home Funding Corporation should be addressed to the company directly,” it said.

REACQUAINTED WITH THE COMPANY

On Dec 16, 2008, Leaf changed his name by deed poll. A acknowledgement of this appears in the London Gazette.

It said Ian Andrew Leaf, of No 6, Allerton Court, Turnberry Close, London, abandoned his old name and assumed the name of Ian Andrews. Leaf/Andrews’ return to normal life was not easy. After his release from prison, he was subjected to a travel ban, although he appealed this through the courts.

He told the court he had been a model convict, who used his expertise to help the authorities improve their systems.

Leaf/Andrews described his time in Brixton as akin to the experience of the main character in the Shawshank Redemption, where the inmate worked as a private accountant for his jailers.

In recent years, Leaf/Andrews fought attempts by the Revenue to have him repay up to Stg£100m in taxes it believed he owed.

A hearing took place in 2007 and the court was told Leaf/Andrews had no money left from his fraudulent activities, that his family trust was in debt, and his investments had lost money.

At some point in the recent past, Leaf/Andrews also returned to work at the Home Funding Corporation, but he is not a shareholder or director.

Mr Ashken, the new owner of the company, said Andrews is a consultant for Home Funding Corporation, but he has no other connection to it. Mr Ashken’s co-director at the company, Sophie Leighton, has other business links to the convicted fraudster.

Ms Leighton, 23, is a director of Good Morning Hotels Ltd and Eunoia Ltd. Both of these are owned by Leaf/Andrews. He was a director of them. Company records show that Eunoia is a consultancy company owned by Leaf/Andrews, but he joined it under the name Ian Leaf.

Ms Leighton became a director of Eunoia in November 2009.

She did not become a director of the Home Funding Corporation until May last year.

Separately, Eunoia had its address at the same office suite, on Waterloo Road, London, as Home Funding Corporation’s UK parent company, City Corporation. It relocated last month.

Earlier this week, the Irish Examiner contacted Leaf/Andrews through the phone number provided to customers of the Home Funding Corporation.

Although it was a Dublin number, it was automatically redirected to an office in England.

Leaf/Andrews was also contactable through the phone number for the firm’s parent company, City Corporation Ltd.

Leaf/Andrews did not make a statement. He said a person called Ian Leaf “did not exist” and all questions related to the company should be sent to its director, Mr Ashken.

Mr Ashken said he and Ms Leighton are the only directors of the company and Leaf/Andrews was only hired as a consultant.

He said, as directors, they operate without any external interference.

“HFC is properly established and operates entirely within the law,” he said.

Mr Ashken said it takes its reputation seriously and would vigorously prosecute anybody who sought to undermine that with “inaccurate, incomplete or otherwise defamatory details”.

THE SUBPRIME SECTOR

Home Funding Corporation, and a company it bought loans from, Wise Finance, operate in a legal, but unregulated, space in the Irish financial sector.

Because they are not licensed, their conduct is not subject to policing by the Central Bank.

Subprime customers who have complained about their plight to the Central Bank have been told there is nothing that can be done, because if a company is not licensed it is not bound by the industry rules.

In one letter from the office of the Financial Regulator, a customer was told there was little that could be done.

“Firms that hold no authorisation or licence from the Central Bank are not subject to the provisions contained in the Consumer Protection Code, which the majority of entities/firms that are authorised/licenced by the Central Bank adhere to,” it said.

The lack of regulation in the subprime sector has been raised in the Dáil on a number of occasions by Sinn Féin TD Martin Ferris.

He has pointed to the high interest rates being charged of customers of Wise Mortgages and the Wise Finance Company, as well as other, similar businesses.

And he said the Government needed to act to close the loophole in which subprime lenders operate.

“Some of the borrowers who have contacted me are under extreme stress and, indeed, duress. In some cases, the lender’s immediate family do not even know of the difficulties involved, and that isolation, along with the burden of often huge repayments, along with the threat of losing their home, can place an intolerable pressure on some people,” he said.

Mr Ashken, the director of the Home Funding Corporation, said it operates within the law and although it has opted not to be licensed, it sticks to the rules.

“Although unobliged to do so because it is not a regulated entity, the company adheres fully to the MARP,” he said.